Mortgage Escrow

[Nish]

I'm feeling fairly comfortable with the list of pros and cons when looking at including escrow as part of my monthly mortgage vs setting funds aside to pay my insurance and taxes.

What I'm looking for is the voice of experience. People that have set aside the money themselves, collected the interest and paid the bills themselves.

Is the juice worth the squeeze in your experience or stick with convenience?

[Hellion360]

I have done both, I don't think it makes a difference either way really. It's just not enough money to matter holding it myself.

I automate whatever I can and currently use escrow.

[TwonTamal]

Same, I have both. Honestly, prefer escrow for the same reasons as Hellion. It automates everything, and whatever little interest you collect from that money, as it's not a large sum, isn't going to be enough to move the needle one way or another.

[Junglepeanut]

I agree with above, the convenience out weighs the small potential earning for me

[Guts]

I'm not an escrow kinda guy. I haven't even been worrying about the interest; I just like to be in control. I find it less of a hassle than giving the bank extra and hoping their analysis is correct.

[Frmrspec]

I’ve seen enough friends/family freaking out because they needed to cover property taxes after some event caused them to use that money to not bother trying to keep track of it… escrow for me.

[Chuck E Ducky]

I use escrow for convenience. I’m pretty sure even with escrow you get the interest. I’m pretty sure I get taxed on the interest I make on it. It’s very little if anything. Definitely not worth the hassle. My accountant handles all of that. I put money into an account that pays property tax on some lands that I own but for anything that I have a mortgage on I just use escrow.

One thing worth doing is dumping your PMI insurance as soon as possible. I think that saved me $150+ a month. But you can’t miss a payment and have to have a certain percentage payed down on your mortgage. But definitely something to look into. Lots of people pay on that the life of their mortgage. I pulled savings to pay my loan down to that amount. They base the percentage off of what you purchased the house for initially not including equity/ improvements. PMI insurance is for the bank of you stop paying. Banks don’t like you getting rid of it because it’s required protections for them. But you can but you got to ask for it to be removed. You basically throw that money away every month that you could put towards paying down your loan or lowering your mortgage payment.

[Jimmydee]

Ask chat GPT lol

[Chuck E Ducky]

Grok 3 is beast!

[Painthappy]

Escrow works as long as they aren't assholes and keep too much in the account. I ran into that once upon a time and quit using escrow.

The money you'll make keeping it yourself isn't going to amount to too much in the end. So it really depends on what you prefer. Pay a little extra every month and don't worry about it, or save it yourself because you know you won't touch it.

[Chuck E Ducky]

Mine cuts me a check at the end of the year if I have to much in it. Or adds a lil to next years payments if it’s too little. Yours didn’t do that?

[Grendel]

We definitely use Escrow services it makes things simple to keep things organized and covered through the year. We just look at the Escrow change request from the lien holder to make sure they make sense. We kind of bounce between having a little too much one year to small deficient the next year. Really not worth doing it ourselves IMO.

[latches109]

Ask chat GPT lol

Prompt:
act as a financial planning expert. what are the advantages of using a mortgage escrow? What are other strategies to maximize the return on your money.

Answer:
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